What is a tax invoice?
A record of goods and services supplied consisting of their descriptions, quantity, date of shipment, mode of transport, total and taxable values, and discounts, if any.
Who can issue a Tax Invoice and when?
A tax invoice can be issued by either supplier or recipient, at or before the time that the consignments are supplied.
Why is a Tax Invoice required?
A Tax Invoice is important because it permits the recipient to avail ITC and also functions as a form of evidence to prove that the transaction happened.
What should a Tax Invoice contain?
- Invoice type: This indicates whether the issued document is a tax invoice, debit note, credit note or revised invoice.
- Name, address and GSTIN of the supplier and the recipient
- Invoice serial number: This unique invoice serial number must be part of a consecutive series, and it should contain only letters, numerals and/or the special characters - and /.
- Date of issue
- Name and address of recipient, along with destination address, State and State code if recipient is un-registered, and value of supply if more than Rs. 50,000.
- Destination state as well as address of delivery if they are different
- HSN or SAC code: If you’re supplying goods, you must include the HSN code unless your annual turnover is less than Rs. 1.5 crores. If you’re supplying services, you must include the SAC code.
- UIN: This ID is assigned to agencies of the United Nations, and consulates or embassies of foreign countries.
- Description and quantity of goods or services
- Total value and taxable value of goods, services or both
- The CGST, SGST, and IGST tax rates and corresponding tax amounts in separate columns.
- Reverse charge statement: The invoice must state whether reverse charge is applicable to the transaction or not.
- Signature: The invoice should be signed by an authorised personnel in either physical or digital form.
What is a revised invoice?
If an invoice is issued between the date of GST implementation and the date that a registration certificate is issued, a new invoice will need to be filed for the transaction later. These are called Revised Invoices. They must be filed within one month after the time the registration certificate is issued.
What are the different types of invoices in GST?
There are 2 types of invoices in the GST regime:
- A tax invoice is issued when a registered dealer supplies taxable goods or services. It is mandatory for claiming input tax credit.
- A bill of supply is issued when a registered dealer supplies GST-exempt goods or services, or for any sale where the supplier is registered under the composition scheme.
How many copies of the tax invoice are mandatory for a supply of goods?
The supplier should make three copies of the tax invoice for a supply of goods:
- The original invoice is issued to the recipient.
- A duplicate copy is issued to the transporter of the goods. The transporter should keep the invoice reference handy, in case they are asked for evidence.
- A triplicate copy is retained by the supplier for their own reference.
How many copies of the tax invoice are mandatory for a supply of services?
The supplier should make two copies of the tax invoice for a supply of services:
- The original invoice is issued to the recipient.
- A duplicate copy is retained by the supplier for their own reference.
How can I revise an already-issued tax invoice?
Should I raise an invoice if the total value of the taxable supplies is below Rs. 200?
No, you do not have to issue an invoice in this case, as long as the recipient is not registered under the GST regime and does not have any need for the invoice. At the end of the day, you must create a consolidated invoice for all of the supplies for which you didn’t issue individual invoices.
How will GST work with advance payments?
If you charge an advance before you sell taxable goods or services to your customers, GST will be levied on the advance. You will be required to issue a receipt voucher when your customers pay the advance.
After you supply the goods or services, you must deduct the advance paid from the invoice total and levy GST on the outstanding amount. The buyer will receive credits on the total GST paid in this transaction.
When do I need to issue a tax invoice for a supply of goods?
If the supply involves a single transfer of finished goods, then the invoice must be issued at or before the time of transfer. If the supply involves the transfer of goods in instalments, the supplier can issue the invoice when the final instalment is delivered to the recipient.
When do I need to issue a tax invoice for goods that have been sent on an approval basis?
For goods that have been transferred on an approval basis for sale or return, since they are removed from the supplier’s premises before the supply takes place, the time limit for issuing an invoice is the earlier of the following:
- At the time of supply
- 6 months after the date of removal
What is the time limit for issuing a tax invoice for a supply of services?
In most cases, the tax invoice must be issued within 30 days from the date of supply. If the supplier is a bank or an insurer, then the invoice must be issued within 45 days from the date of supply.
Issuing invoices based on scenarios
If I sell both taxable and exempted products to the same customer, should I issue a tax invoice and a bill of supply separately?
In this case, you should issue a tax invoice for the taxable supply, and declare the exempted supply in the same invoice.
Should I include expenses like transportation and packaging of the supplies on my tax invoice?
Yes, all expenses including transportation and packaging should be included in a tax invoice, as per Section 15 of CGST Act and Invoice Rules.
I supply construction materials to builders. Should I issue a delivery challan or tax invoice?
That depends on how the construction materials are utilized:
- If the materials are supplied in instalments during the course of construction, issue a tax invoice.
- If the supplied materials are used as tools for construction, issue a delivery challan.
I have tax liabilities related to reverse charge. Should I issue a tax invoice?
If you have reverse charge mechanism liabilities, you should self-invoice.
I own a travel agency. If I issue an invoice for tickets booked by an organization for its employee, what information should I furnish under the GSTIN and address section?
Mention the organization’s GSTIN under the GSTIN section. You can mention two addresses in the invoice: use the organization’s address as the billing address, and the particular employee’s address as the shipping address or as a reference in the invoice.
I issued an invoice and filed my GSTR-3B before the deadline. However, my customer claims that they have not received the invoice and did not include it when filing their own GSTR-3B. What should I do?
You don’t need to do anything. Just make sure that you don’t end up cancelling the invoice, because that will cause you to pay the same tax amount twice. If you’ve filed your GSTR-1, your customer will get the credit for this invoice in their GSTR-3, regardless of whether they report receiving the invoice.